[onlyrealcuzzo]

Because the Federal government doesn't have a sales tax?

This system is easier than getting all 3 branches of the government to impose a VAT.

And also, that doesn't solve the problem.

If you're Apple - you have only pay taxes on your sales in the US.

If you're a smaller company, you pay taxes on all your profits, plus a VAT on your sales in the US.

[pseudo0]

What's stopping the federal government from implementing a VAT? I realize there's a ton of legal and political inertia, but theoretically it seems like it would be an improvement.

In an ideal system everyone would charge a VAT rather than a corporate tax, resulting in a level playing field for foreign profits as well.